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A Logica survey of European banks questions whether imminent implementation of the Payments Services Directive (PSD) and SEPA can be made mutually supportive.

A new study of 22 banks across the EU and EEA implies the need for pan-European coordination to ensure a consistent PSD roll-out if the November 2009 deadline is to be achieved.

Lack of clear dates for PSD transposition 

The results of the survey raise issues as to how PSD transposition can support the achievement of SEPA implementation and migration without such consistency.

Inevitably this puts additional emphasis on the significance of the Payment Services Directive Transposition Group led by the European Commission.

The survey of leading banks across Europe also reveals that a lack of clear dates for PSD transposition and the likelihood of geographical variation in the implementation of the PSD make planning difficult for banks.

This affects those operating across Europe most severely. The issues raised threaten the consistent implementation of the PSD provisions.

These provisions are an essential element in driving migration to SEPA Schemes across Europe.

Serious disparities 

The study, conducted by Logica in March and April this year, and supported by the IBOS Association, questioned 22 European banks on the implications of PSD transposition for European banks’ business and compliance planning programmes in payments and cash management.

The results of the study showed that less than a third of the banks questioned were in a position to know exactly when the directive will be transposed into national law.

Simon Bailey, director of payments at Logica, said that the research indicated that serious PSD disparities across countries could risk reinforcing national payments markets.

“A combination of variations in PSD implementation and national community-defined Additional Optional Services (AOS) for SEPA could ultimately undermine the development of a single payments market – the opposite of the original SEPA vision. For multi-country banks this adds considerable complexity for the assessment and planning process,” he explained.

Considerable added complexity 

All the surveyed banks reported the existence of PSD programmes and identified a primary department responsible for assessing the impact and for implementation.

Respondents named the National Banking Association or central bank as the national body behind PSD transposition.

For multi-country banks, such as the respondents, this adds considerable complexity to the assessment and planning process.

The depth of the impact within respondent banks was also made clear with over one third indicating that ‘Special cross-departmental Programme Board’ is responsible for the PSD programme, i.e. risk if the programmes are not set on time and with appropriate lines of communication across the departments.

Almost 100 per cent of respondents expect increasing impact on ‘SEPA project/programme’ and ‘Product/Service definition and development’ that augment the pressure on cross-departmental, IT and business programme offices. 

Banks also report increasing focus on ‘Compliance programmes’, ‘Payments Operations redesign’, SEPA clearing and settlement’, and ‘Domestic clearing and settlement’.

National variations in payments services 

Bailey warned that discrepancies in the timings and details of legislation across European countries threaten consistent transposition of PSD by November 2009.

Each country can choose between a “Mini-PSD” (including all opt-outs) and a “Maxi-PSD” (with no opt-outs).

Bailey said that this creates national variations in payments services and does not support pan-European consistency. It also makes planning within banks complex and subject to change.